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the leasing process. and to compare the port metaphorickally to a business, [speaker not understood], we get everything ready and we manage the revenue stream, a large part of the revenue stream ~ and fill up our properties. so, without our tenants, none of us would be here. and, so, the leasing process starts with an application process and prospective tenants contacting port staff to find out what is available and if what they are doing would fit into port property. so, first, you have the application phase of the
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process. then it goes to an evaluation phase, lease preparation phase, and then the lease execution phase. and the initial contact from the prospective tenants usually comes in the form of a telephone call. and staff has an in-depth conversation with the inquiring party to ensure the uses are compatible with the waterfront plans and the facility. and once that test is met, then we instruct them to start the application process. and as part of your package you received our lengthy application. ~ in one of the exhibits. so, the first application of phase is mostly paperwork and fact gathering.
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then we go to the valuation stage. and the lease is -- the application is not only evaluated by the real estate staff, but we have a host of regulators that like to pay attention to what we're doing. we have historic preservation. we have building code. and we have a lot of partners within the port staff, like the engineering department and the planning development department that help us get through that process. once we have done our major evaluation that also includes looking at businesses or individuals' credit history, we also look at their financial capacity. then the terms are presented to the prospective tenant and any negotiating points are
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reviewed, discussed, and agreed upon. once we get to that point, we get into the physical preparation of the document. and in conjunction with the lease or the legal staff, we pair basically information that goes into terms, use of the property, and then we go into the standard boilerplate lease. and if, based on port policy, the terms are 10 years or greater or the revenue is $1 million or greater, that lease would come before you as an approving body and then in some cases it would need to go to the board of supervisors. any deviation from set port policy is also brought before you as an approving body.
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once there is approval by all the recommended and required parties, the lease execution phase begins and we have to get insurance, security deposits, operations plan, and any other requirements of any of our regulatory bodies. and then the lease is executed. and becomes the ownership of one of the property managers, of which we have five property managers and two senior property managers. [speaker not understood]. thank you all very much for being here. ~ which are in this room. thank you all very much for being here. and to look at our portfolio and what our property managers
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manage, this is a snapshot of the different types of lease properties that we have. and as i go through my presentation, please don't hesitate to interrupt me. as part of the approval process, i've listed here the 10 primary regulatory partners that participate in the port's approval process. as you can see, many parties like to participate in what we are doing. in fiscal year 2012-2013, we executed 72 new leases or licenses with an aggregate
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revenue value of $3,0 64,0 90 and that's an annual revenue amount. ~ and it represents over 5 million square feet. we do 42 special events, and that includes events in cooperation with the giants and with city hall. and also because our port is such a great place to visit, we get a lot of nonprofits that use our properties to raise money for their efforts, like the heart association, susan g. k oman and a variety of other nonprofits. we as a result of our participation with the america's cup, we relocated or had to terminate 37 tenants, and we manage 557 tenancies. and many times we hear about the giants and we hear about the exploratorium, and we hear
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about the ferry building, but i would say 95% of our tenants are small businesses ~. there are city-owned resident businesses and they're working class jobs that support many of the businesses in the rest of the city. we have warehouses that store alcohol for our restaurants, fish processors, and many businesses that take the goods that they store on the port property and deliver them to various businesses around the city. everybody likes a piece of pie, so, this is a snapshot of the agreements that were executed in 2012-13. and as you can see, the majority of them are new agreements that are using our properties to become available.
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and we are proud of the work that we do. and there are projects that come to the port that are -- that don't meet -- they don't quite meet the planning and development -- development projects like you have out of pier 70 or seawall lot 330. ~ that are tenant improvement projects. and as you can see in the next two slides, there are a lot of projects that span the length of our 7-1/2 miles. and to give you a better idea of the wide variety of types of properties that we manage, we
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manage restaurants. we manage office space. and in the lower right-hand corner, it's hard to read, but that is a business called bay natives that is down adjacent to her on's head park. and the gentleman cult ~ cultivates and sells plants native to san francisco. [speaker not understood]. in the top left, you have 601 cesar chavez that is the home of the black coalition on aids. it used to be a restaurant and it's been transformed into a fabulous facility. unfortunately i don't have any pictures of the inside. and they're doing great turning projects inside up there. we have a picture of the ramp. we have a picture of lou's
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blues at fisherman's wharf t. was recently remodels. we have a port project on the right of that that is pier 43 promenade at fisherman's wharf ~. we have a picture of the round house. and the bottom right is the [speaker not understood] building which is a warehouse down at pier 80. in the last five years we have survived a recession and we have survived about 2-1/2 million dollars worth of port property that has been taken over by the america's cup. but as you see with our annual revenue stream, we have continued to increase our revenue year over year, except for a slight dip.
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and we would like to thank you for requesting information on how the process works. it kind of gets hidden in the background, but without a lot of these processes that over the years as an approving body, you set policies in place so that the application process isn't too onerous, it doesn't have to come to you for approval. we can get a new tenant into a facility in three to four weeks. and we're proud of the work we do. we're proud to support our commissioners, tenants, and the city managing this wonderful piece of property. every day it looks better and better. so, if you have any questions, i'm available for questions. >> thank you. >> [speaker not understood]. public comment first or not? >> i can. >> i just had a couple questions.
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i love that timetable [speaker not understood] for a tenant to move in. i like that a lot. what i don't understand is how long -- how long does the environmental review take for some of these projects? and who does that? is it in-house? if somebody wants to -- let me rephrase it. if somebody wants to open a restaurant, do you have to do an environmental study on that? >> it depends on how extensive the project is. if someone wants to rent office space, say, at the ag building, the environmental review is, you know, takes an hour, maybe. all the way up to if somebody is changing use or if there
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are, say, hazardous environmental uses, we have the real estate staff -- shannon, you're here someplace -- richard berman who is out today. they do an assessment of what is going -- the environmental impact for whatever the use is in whatever facility it's going into. and it ranges anywhere from a check off at our weekly pipeline meeting where all the groups come together and check off the things that need to be done to just a check off to, say, for example, power intelligent transportation down at pier 50 where they are maintaining their bus fleet and filling fuel and changing oil. that requires a full-blown operations plan and a larger assessment. so, just depends on what the
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use is, where it's going, and what the environmental hazards presented by the activities is. >> i'd like to elaborate on that a little bit. susan described it very accurately as it reflects her division, but in fact there are outstanding environmental impact reports for almost every piece of property we own. and, so, when something goes quickly and easily as a check off as susan just described, the use is consistent with the outstanding environmental impact report. and somebody either in the planning division of the port or the city planning has done an analysis to confirm that the new use is going to conform with that. in cases where there's a change of use, then that can trigger new environmental impact review under c-e-q-a. we also explain how another environmental practices for the operations side which she was just describing which is a different portion of our division. so, i hope that helps.
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>> you also said, susan, that [speaker not understood] as it relates to small business. i would assume a lot of these small businesses have gone within the envelope of a particular [inaudible]. they're going to renovate or infrastructure work on [speaker not understood] environmental review required. what i'm trying to get at here is why should the process of leasing the property at the port take as long as it does? we have a problem over at dbi for many, many years and we worked so hard to sort of streamline it, make it simple, move the obstacles out of the way. and, you know, now we have an
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over the counter permit system over there which works like a well oiled machine. so, i'm wondering if the port -- i'm just trying to help here -- if the port would look at something like that because we do -- we were don't have a great reputation as far as getting things done as far as leasing -- most people i talk with are hard to deal with. [speaker not understood] i get. i'd like that to improve, you know, not have that sort of stigma that the port is hard to deal with as far as renting space or -- you know, like the commissioner to maybe try and work with some ideas to maybe dituff
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and also -- also processing a lease would take 40 to 90 days if it's just a lease for an office space for rent for office [speaker not understood] would take that. maybe it doesn't take that. i just need to be enlightened. that's all. >> for a standard lease going into an office, if it's office for office, that's usually 30 days. >> right. >> and anything beyond that is because there are layers of regulatory or policy reviews that need to be done. and, you know, going back to the slide with the regulatory partners, some of the tenants you may be talking to are doing leasehold work, so, they have to go through the permit process that does add time. but that's usually after they
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get their lease. they apply for their permit. so, i guess it depends on what stage they are having difficulty getting through the process. but for the cookie cutter deals, we're looking at 30 days. to rubin solis's credit, we have one of the production companies doing a movie here in san francisco. and i think from start to finish, we got the application and the lease produced, signed, keys in hand. >> [inaudible]. >> less than a week. so, it can be done. we do a lot of those. not that fast, but i'd say 2 to 4 weeks for the cookie cutter deals that aren't a change of use, or don't need an operations plan, or needs
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historic review, or they don't need a building permit. >> maybe i can elaborate on that as well. i would note a couple of things if you really want to be helpful. if you look at the port's's delegated authority to myself and the staff, it is extremely narrow. so, if there is a tenant who doesn't want to agree to a paragraph in that 30-page lease, it takes awhile to negotiate that and for them to decide whether it's worth it for them to come back to the port commission. we don't have the delegative authority to negotiate anything that's not a material change to the standard form lease. that's where one of the hiccups occurs. a second hiccup occurs because sometimes people put on their application that they want to be a warehouse, and then as we're clarifying it turns out they want to be a warehouse and a retail space and that runs afoul of our retail bidding process. so, we work on that. the third hiccup occurs because they need a regulatory permit
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from bcdc, bcdc staff gets 30 days to review such a thing, typically comes back with a list of items that then takes some period of time to be negotiated. a fourth hiccup is the standard indemnification clauses and the city standards for insurance. oftentimes they are very, very difficult for smaller tenants to understand and then get the requisite insurance in place. so, there's any number of places that hiccups do occur because as susan described, unlike the private sector, there are so many places that have impacts. if you add to that that a tenant might want to make tenant improvements, they're not usually knowledgeable of their requirements for historic preservation. so, there is a negotiation around, if you will, moving their vision into something that was acceptable for historic preservation. sometimes they want to have a person per square foot that
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triggers a requirement for a new bathroom or some other thing that we don't have in our old warehouses and that has to be built out and there is a negotiation around who will pay for that. sometimes there are [speaker not understood]. it starts out as photo storage and turns into a museum. so, everything happens. there isn't any one thing i can point to, but if you realery seeking a way to streamline them, maybe what we should look at is what the delegated authorities are for negotiating more broadly around terms in the [speaker not understood]. >> i'd like to do that. if it's on the lease side, if i'm applying for a lease to the port and you guys want a pink piece of paper, it's up to me to get it and get it quick. [speaker not understood]. i don't know, maybe it's -- i'd certainly agree we should take a look at that. >> okay, be happy to.
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what would really be helpful to the real estate staff is often folks that eventually get to your ears are folks that are having a problem or they're not getting what they want. but if you feel free to call me and we can walk through it and investigate what the hurdles are, or their perceived hurdles. sometimes it's just a natural progression that it takes time to do things. or maybe they're being asked to do something that they don't really want to do. so, it would be helpful if you would call me or the leasing manager or any of the property managers and, you know, ask -- that would be helpful to us if we can learn what the perception is out on the street, if it's different from
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what we're perceiving. >> the perception out on the street is people on the street don't know what's available at the port for rent, first of all. and i don't think it's advertised probably well enough is one issue. [speaker not understood] perception i got long before i became a commissioner, not something yesterday or the day before. i'm hearing because i'm the commissioner. it's that i've heard it for many years. so, and i don't necessarily like to hear it. i'm just trying to come up with -- understand you guys come up with some ways to improve it. >> over the years i think we
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have. we strive, we continually look at our process. we continually make changes. so, we're here for you to guide us and help us with that process. and we have committed to look at our website and how we put our vacancies on our website. it works for us, but it might not work for the general public. so, we're going to look at that. and make some changes to that process. ~ >> we certainly as commissioners don't want to be, as i said, down in the weeds all the time. i know often as commissioners, we ask a question about something, then we get a pile of paper this high that will take us a week to read it. and we don't have that kind of time. so, that's why i'm asking the questions today. but thank you anyway. >> sure. >> commissioner adams. >> first of all -- first of all, susan, i like your comments. commissioner murphy, he's a real estate expert, i'm not. but i've just got a few things
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i'd like to add. it's clear to see the vacancy rate is 8% compared to 9.5 city-wide. it seems like we're doing pretty good. then when i look at the revenues from 2009 to 2013, we've only -- i mean, to me one to one, 2 and 2 is 4. i look at a syncratic approach. [speaker not understood]. i haven't heard anything in the streets saying there is a difficult process to come back to the port. i'm pretty much out in the streets. that's good. one commissioner can hear one thing -- that's why we have five commissioners, so, we all have different points of view which i think makes it good. if there was something that you thought we could improve on, what would that be? >> it ~ the things that we
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have control over, i think we have made an effort all the way down from monique to the staff that are actually doing it. i think where our big hurdle is, is regulatory issues, city ordinance issues. those are probably the biggest stumbling blocks and unfortunately sometimes a good intention becomes a hurdle. so, for example, the bidding process, everything needs to be publicly bid and you all know what that process is. it is a long process. but sometimes it needs to be a long process to ensure that nobody or nothing is getting left out. because when you do things quickly, sometimes you make mistakes. so, i think that what we can do is to continually look at our process and continue to improve
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it as we find things. you know, we've been doing the same thing for a long time. it's comfortable and it's hard to change. everybody has trouble with change. so, to listen to each other and for you to work with us and for us to work with you in improving whatever what we hear, what's difficult, and just make sure that we get the opportunities that are on the port out there for everybody to participate in. >> okay. like i say, i'd like to see you work closely with commissioner murphy. he might have some insider things that i wouldn't have or some things that he may think because that's what he does. he comes from that kind of a background. >> well, i have a table and a bunch of chairs in my office that you're welcome to come and use any time. >> we do have public comment. jeff sears.
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good afternoon, director moyers, commissioners. really glad to be here today. over 25 years ago, my wife helena and i started our business down at fisherman's wharf. since then the real estate managers have worked with us along the way, being very accommodating and instrumental in making the port's resources accessible to businesses. the first port member that really opened the door for us early in our careers was james herman. he had the vision to know that [speaker not understood] was in transition and with it would come new types of businesses like ours. i wanted to take this opportunity to thank the port and acknowledge the significance of its role in the
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evolution and growth of our business that would not have been achieved without the port's support. in more recent years, [speaker not understood] rip and j have been extremely supportive and helpful during those adjustment periods providing us with storage space near our operations. without the a sits tans ~ assistance of the port and its businessman jerk, it's clear our business would not have reached the success it has today. because of the port's consistent support, our company has grown to over 100 employees on the waterfront earning livable san francisco wages. as we have continued expanding over the years, the percentage rate [speaker not understood] occurred has also increased. we are sure it has been well received by the port as well. it has always been a [speaker not understood] to work with the port and we hope to continue this prosperous relationship into the future. >> thank you. is there any other public comment?
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thank you very much. my name is scott [speaker not understood]. i'm general manager of [speaker not understood] companies, we're a relatively new team to the port. we relocated from the port of oakland. we're a small business and the port real estate staff was very accommodating and they really assisted us in our move in. we went through the environmental procedures and all the regulatory compliance and the environmental staff was a big help. we understand that they have a tough job. there's a lot of requirements and a lot of regulatory people looking down and checking their work. so, it's a tough business, but you have to -- we have to comply in order to make sure we comply. it was kind of stringent, but we understand that that's the requirement and they made it very accommodating so i'd just like to thank the port and your staff for their efforts. >> thank you. welcome to the port of san francisco.

August 18, 2013 8:00pm-8:31pm PDT

TOPIC FREQUENCY Us 10, San Francisco 4, Bcdc 2, Murphy 2, America 2, The City 2, Cesar Chavez 1, Rubin Solis 1, Jeff Sears 1, Exploratorium 1, Susan G. 1, Oman 1, Promenade 1, Adams 1, Shannon 1, Oakland 1, Monique 1, Moyers 1, James Herman 1, Helena 1
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